05/07/2024
I want to comment on the news of the Presidential Economic Coordination Council (PECC) and we will be addressing the subject matter from the political economy perspective because as José Saramago rightly wrote:
"It is economic power that determines political power, and governments become the political functionaries of economic power."
I am motivated to comment on the above subject matter and from the perspective chosen because of the incessant fire-brigade approach to economic policy in Nigeria which has often than not been dead on arrival without meaningful improvement to challenges aimed to address; and secondly, to explore the continuous coordinated exploitation and manipulation of Nigerians by those wielding political and economic power.
The above is evidently true as Saramago's statement suggests, that those who hold economic power (such as wealthy individuals, corporations, and financial institutions) ultimately control political power. Governments and political leaders, according to this view, act in ways that serve the interests of these economically powerful entities rather than the broader public.
This idea implies that economic interests shape political decisions, policies, and governance structures, making governments subservient to those with significant economic influence.
To continue with our political and economic explanations of the rational and composition of the PECC, I want to clearly state my assumptions:
1. As Karl Marx postulated, the transformation of every society is caused by class struggle.
2. Class struggle will lead to changes in economic structure and functionality.
3. Though the oppressed should seize power, the advanced bourgeoisie and political and economic gladiators will enter a symbiotic contractual relationship to compensate their losses that might arises from the revolution of the masses.
4. The masses are not therefore from the above (3) not needed to be part of the negotiations but are considered as producers to be exploited.
5. Consequently, the goals of the masses and the powerful political and economic actors are parallel and often conflicting. For example, while one party advocates for increasing capital stock, the other fights for “minimum wage.”
6. Finally, my comments will be based on eliciting critical questions from the news article read for reflection.
Economic indicators such as exchange rate, high inflation rate, high unemployment rate, national insecurity, worsening balance of trade, and low foreign direct investment with the often highlighted policies have often led to the suffocation and termination of many start-ups and established domestic industries due to their inability to compete with their foreign counterparts enjoying tax and tariff waivers and total profit repatriation incentives.
The statement by Aliko Dangote, Chairman of the Dangote Group, on behalf of the organized private sector in the PECC, claiming that “the Nigerian economy can be turned around in a few months” reflects the joy of being privy to the general economic policy direction.
This position will allow him and his allies in the PECC to strategically position their conglomerates for long-term benefits, and this is true for all the capitalists and financiers in the PECC, including Tony Elumelu, Abdulsamad Rabiu, Amina Maina, Begun Ajayi-Kadir, Funke Okpeke, Doyin Salami, Patrick Okigbo, Kola Adesina, Segun Agbaje, Chidi Ajaere, Abdulkadir Aliu, and Rasheed Sarumi.
You may ask why them? But, I will ask why not them, from our exposition above, it has to be them because:
"It is economic power that determines political power, and governments become the political functionaries of economic power."
The earlier we know that, the president (and executive members) and these individual capitalists are collaborating to secure their interests, possibly because their foreign investments and assets have been devalued and needing resuscitation as the result of the spiral naira/dollar exchange rate, the earlier we start expecting the imminent phase of economic hardship because as rightly put by
Adam Smith:
“It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own self-interest. We address ourselves not to their humanity but to their self-love, and never talk to them of our own necessities, but of their advantages.”
One might argue that they too are affected by the current economic hardship, but theirs differs because they have the power to enact corrections that will benefit them during such times.
For instance, with interest rates of over 30%, no investor would take a loan if he discovers that, most profits would go towards servicing it. But from the current arrangement and composition of the PECC bankers and industrialists within the PECC can thus negotiate terms that favour them after eliminating ordinary investors from negotiations table to put into work the initially idle capital (money) owned by them because of the low demand barrowing resulting from the high cost of borrowing (interest rate).
This is why, in both lean and prosperous times, capitalists and politicians with real power will always favour their interests. Dangote’s statement that “the public (government) and private sectors would work together to revamp the economy” implicitly reveals this.
By advising the government on necessary policies, they position themselves as overseers of public resources to serve their interest and accumulate more capital.
His statement continued by saying that “Our economy can be turned around in a few months. Things will soon change. We will work to make sure that things change for the better” raises the question:
for whom? Such changes will no doubt benefit those with capital and established industries needing variable inputs, with fixed inputs already on hand, allowing them to absorb current costs at diminished marginal production levels.
One may take this as frivolous statement or the usual propaganda by the rather unfortunate masses by saying that they will create jobs, jobs that machines have taken off the populace? Or is it the crude oil that little is done by labour to extract? Who make the crude oil? And compare the question with that of who plants and extracts the rubber from rubber trees?
Dangote's call for policies to protect domestic industries at the Manufacturers Association of Nigeria (MAN) summit is a call for a restrictive economy to benefit them, especially, following the neo-liberal economic policies that Nigeria has pursued over the years. Please, do not misinterpret me to be supporting either of opened, closed or any in between the two.
The point I am making here is that, after the restrictive economic policy to favour the domestic capitalists’ accumulation of more capital lost to the previous opened policy, the government will in no time revert to opening up the economy to please the IMF and World Bank. I strongly feel, it is this back and forth policy changes motivated by politics of the economy by incumbents as always that have been the challenge.
This is not justifiable, it is totally irrational in the public policy analysis arena, because as agreed policy inconsistences is worse than no policies at all.
As co-owners of multinational companies, they benefit in any way. They only "rescue" the economy when their losses in one area outweigh their gains in another as clearly put by Adam Smith in his Wealth of Nation quoted above.
Going back to Dangote’s statement that, “Import dependence is equivalent to importing poverty and exporting jobs. No power, no growth, no prosperity; similarly, no affordable financing, no growth, no prosperity. There is no industrialization without protection.” reflects the current reality these people are confronted with unlike the food concerns of the masses.
Which is why we should not expect anything positive from their intervention which is clearly to generate power, have access to finance and intensify the level of their industrial capacities. To put it in more obvious term, nowhere is “…for the people” mentioned in his statement.
Consider this: How many industries do we have? How many bakeries are owned by Nigerians, apart from those owned by Chinese and Indians? How many Nigerians own a civil construction company like Julius Berger or textile factories, if any exist?
Likely none, apart from the members of the PECC and their clique.
By: Dan-Abu Michael Ngbede
